6 CHAPTER 1 WHAT‘S IT ALL ABOUT?
You are probably an expert in your field, but I assume that it is not business planning.
In other words, you do not really need any prior knowledge to use this book, other than
common sense. But bear with me. When I start telling you something that you already
know, skim through it to the next section. What you know now is easy to read about. The
rest is just as simple – it is just unfamiliar the first time around.
A quick fix or a longer-term tool?
This book is primarily about writing a business plan. Many busy executives confronted
with a demand for a plan want only to get one on paper as rapidly as possible. This book
provides a fast track to doing just this. At the same time, its pragmatic approach should
be of value to those with time for a more considered approach and also to the seasoned
veteran of writing business plans.
We accept any currency, but no checks
Currencies are a nightmare. Never mind exchange rates, what should I call them
in this book? I do not know your favourite currency. I struggled with dollar/franc/
sterling (alphabetical – no favouritism implied, sorry if I omitted your currency),
but that was too much of a mouthful. I experimented with the euro. I even tried to
make up a name for a new currency.
Eventually, as you will see, I drifted to the dollar. It is the unit of account in some
African countries, Australia, Canada, Fiji, Hong Kong, New Zealand, Singapore,
Taiwan, even the US. This seems to make it a fairly international choice. I hope that it
does not distract you.
I do not stick to any particular flavour of English. I use what seems to be most
unambiguous and concise. For example, I think that the American word inventory is
better than stock and the British cheque is less ambiguous than check.
The terms company and corporation are used interchangeably. In general, I refer
to business areas – a formal or loose grouping of closely related activities. You will
probably want to write a business plan for each business area plus one for the
overall collection of businesses. The top-level plan might cover an enterprise where
the various activities are interrelated, or a holding company for seemingly unrelated
businesses. This is introduced in Chapter 3 and discussed in more detail in Chapter 6.
References to the chief executive should be interpreted as ‘the most senior
executive’. In the US, this probably means Chairman, President and CEO. In the UK,
this person is called simply the MD (Managing Director) – see Chapter 4.
t
A QUICK FIX OR A LONGER-TERM TOOL? 7
The fast track through this book
Shows you
Why plan?
Why, what, how, who
How to create a standard
document to ease the pain
of writing your plan
How to kick off the
planning process and get
the first words on paper
How to come to terms with
who you are, what you do,
and how you do it
How to understand your
competitors, customers
and operating environment
How to develop a winning
strategy and turn it into a
plan and objectives
How to think about the
numbers that you need
How to project
sales and gross profit
How to estimate
operating costs and
forecast net profit
How to work out your
funding requirements and
value your business
How to use uncertainty to
your advantage
How to gain approvals and
win the required funding
How to put the plan to
good use
Gives you
Focus for your plan
The basis for your current
and all your future plans
The first and last sections
of your plan – plus some of
what goes in between
A solid description of the
business and its people
Critical competitor
analysis and market
positioning
Objectives, a strategy and
your operating plan
Background to the key
financial projections
Sales, costs of sales,
gross profit
Operating costs, capital
spending, net profit
Balance sheet, P&L/
income, cash flow,
funding, valuation
Evidence that you know
what you are doing
Approval and funding
A successful business
1 What’s it all about?
2 A winning presentation
3 Getting down to it
4 Know yourself
5 Getting down to it
6 The core of your plan
7 About these numbers
8 Getting to gross profit
9 Getting to net profit
10 Funding the business
11 Managing risks
12 Getting it approved
13 Now make it happen
This chapter
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